On Our Radar

On Our Radar

Democrat Details Plan to Cut Energy Tax Breaks

The top Democrat on the tax-writing U.S. Senate Finance Committee on Thursday sketched out some details of the Democrats' plan to roll back billions in tax breaks for the oil and gas industry.

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Senator Max Baucus said he wants to end a manufacturing deduction used by energy companies and trim a credit that companies get for royalties paid to foreign governments for exploration, among other measures.

President Barack Obama this week asked fellow Democrats to draw up a plan to pare tax breaks for the industry, a goal he has been pushing for several years -- without success.

Both parties want to capitalize on voter angst over high gas prices, which at a national average of $3.88 a gallon are about $1 a gallon more than a year ago.

Baucus also proposes to add an excise tax on certain leases in the Gulf of Mexico and backs new incentives for consumers and manufactures to buy and make fuel efficient vehicles.

The Montana lawmaker said he will lay out more details after talks with fellow members of the finance committee.

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This week BP, one of the biggest oil companies, reported first quarter profits of $5.5 billion despite setbacks from last year's massive oil spill in the Gulf of Mexico.

Even if some of the measures pass the Democratic-controlled Senate, they would most likely be blocked in the Republican-controlled House of Representatives.

On Tuesday, U.S. Attorney General Eric Holder voiced concerns about some "disturbing" developments in energy markets that the Justice Department will probe.

White House economic adviser Gene Sperling said on Tuesday part of the subsidies to the oil industry could be used for deficit reduction and some could be used for research and development of renewable energy